Why has Stori's credit card application approval rate dropped by 15% over the past month?

Introduction

The recent 15% drop in Stori's credit card application approval rate over the past month is a critical issue that demands immediate attention. This decline could significantly impact customer acquisition, revenue, and overall business growth. To address this problem, I'll employ a systematic approach to identify, validate, and resolve the root cause while considering both short-term fixes and long-term strategic implications.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might have been a recent change in our credit scoring model. Has there been any update to our risk assessment algorithms in the past month?

Why it matters: Changes in credit scoring could directly impact approval rates. Expected answer: Yes, there was a minor update to the model. Impact on approach: If confirmed, we'd focus on validating the new model's performance.

• Considering potential market shifts, have we seen any significant changes in the demographics of our applicant pool recently?

Why it matters: A shift in applicant demographics could affect overall approval rates. Expected answer: No major changes observed. Impact on approach: If true, we'd look more closely at internal factors.

• I'm curious about our competitors' actions. Have any major competitors launched new credit card products or promotions in the last month?

Why it matters: Competitive actions could be drawing higher-quality applicants away from Stori. Expected answer: One competitor launched a new cashback card. Impact on approach: We'd need to assess the impact on our target market and potentially adjust our product offering.

• Thinking about operational aspects, has there been any change in our application processing systems or staffing in the credit department?

Why it matters: Technical issues or resource constraints could slow down approvals. Expected answer: No significant changes reported. Impact on approach: If confirmed, we'd focus more on policy and model-related factors.